Corporation Tax Act 2010 section 238

No claim after loss of accreditation by the CDFI

Section 238 deals with the consequences for community investment tax relief claims when a Community Development Finance Institution (CDFI) loses its accreditation during the five-year investment period.

• If a CDFI loses its accreditation at any point within the five-year period, no further tax relief claims can be made for the investment from the relevant accounting period onwards.
• If accreditation is lost during the first year of the five-year period, the cut-off point is the accounting period in which the original investment date fell — meaning relief is blocked from the very start.
• If accreditation is lost after the first year, the cut-off is the accounting period containing the last anniversary of the investment date before accreditation ceased, or the anniversary itself if accreditation ceased exactly on that date.
• The effect of these rules is that the loss of accreditation can prevent claims not only for the accounting period in which accreditation was lost, but potentially also for an earlier period.